Heinz performance system the key to leveraging Golden Circle brand

Eighteen months after Heinz acquired Golden Circle’s Australian operations, the company has developed a new 30,000 square metre warehouse and increased tetra pack output by 30%. Derek Parker writes.

Eighteen months after Heinz acquired Golden Circle’s operations in Australia, the process of integration is going well and looking towards future growth, according to Gary Thomas, who was appointed as general manager, manufacturing, Heinz Australia, at the time of the purchase.

“It was a bit of an eye-opener to some of the Golden Circle people, but they have come to see the benefits of working in a global group dedicated to expansion and continuous improvement,” Thomas says, pointing to the company’s commitment to upgrade site infrastructure and procedures to meet Heinz’ global safety and environmental standards. That will eventually involve investment of around $20 million, with around half having already been spent.

Heinz now operates five sites in Australia, including the Northgate pineapple cannery in Brisbane — now one of Heinz’s largest factories globally — and the Mill Park chilled juice factory in Melbourne. Part of the upgrade program has been the construction and development of a new 30,000 square metre warehouse at the Northgate site.

“We have been pleased to realise a few ‘quick wins’ in productivity since the integration, such as an increased output of around 30 per cent on the tetra pack line,” says Thomas. “Savings have so far been realised through the consolidation of our buying power, together with Heinz Australia. Further savings will be realised once the impact of new investments in systems and infrastructure, as well as marketing to increased volumes, start to flow through.”

A key part of the integration project involves the adoption of the Heinz Global Performance System. The HGPS is a performance system that pulls the entire supply chain into a standardised continuous improvement approach — a global program that everyone can follow, at their own pace. All the elements of best-practice manufacturing, procurement and logistics are sequenced in this system so they can be used at the right time in the improvement process. The ultimate goal is a devolution of responsibility to line workers and employees, as far as possible.

“It’s a key step, and it’s designed to take place over a lengthy period, usually between five and seven years,” Thomas says. “There is still a long way to go in the Australian operations, but so far we are making good progress. It has been a major advantage that we can point to other Heinz plants around the world that are a bit further along with the HGPS, so the Golden Circle people can see where it leads and the advantages it offers.”

Thomas sees the integration of management information systems as crucial, making the point that this was one of the first areas for new investment after the acquisition. A common system of management information and performance data also allows for friendly competition between plants, the highlighting of best practice, and consistency across the group. Thomas plans to increase the transparency of the organisation so employees are aware of the larger performance picture while understanding where their own contribution fits.

He emphatically notes that there are no plans to change the Golden Circle brand.

“Both domestically and in the region, the brand is an icon, a gold seal,” he says. “It’s a keystone of our future expansion strategy. In fact, I think that we haven’t even started to tap the potential tied to the brand. One of my areas of focus is to improve operational and performance standards up to where the brand is, so we can make the most of that asset.”

Thomas says that he has not found differences of culture to be a major hurdle, especially after the workforce realised that Heinz planned to make major investments in health and safety, as well as sustainability.

“One of my former roles was with the Environment, Health and Safety portfolio for Heinz North America,” he says. “I have found that a common feature all around the world is that people want a safe working environment. When the Golden Circle people understood that Heinz attached a great deal of importance to that, they realised that there was a lot of cultural similarity.

“Even while I am determined to drive the improvement process forward, I have found a lot to admire in the Golden Circle operations. Some of the engineering solutions that have been developed by people looking for improvements in their own area, for example, are extremely good. These are things that the global organisation could learn from.”

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